Dartmouth-Hitchcock and Fletcher Allen Team Up on Health Care Delivery for Vt. Medicare Patients

Lebanon — A new partnership between Dartmouth-Hitchcock and Fletcher Allen Health Care that would affect 43,000 Vermont Medicare beneficiaries has received federal approval and will be rolled out this year.

The arrangement, called OneCare Vermont, was one of 106 new accountable care organizations, or ACOs, that received the OK to begin coordinating patient care in the U.S., Health and Human Services Secretary Kathleen Sebelius announced yesterday.

If the arrangement works as intended, Vermonters should benefit from a more efficient health care system that focuses on keeping people healthy and out of the hospital instead of treating them only when they are sick, said Dartmouth-Hitchcock CEO and physician Jim Weinstein.

“This goes back to our whole plan really of creating a sustainable health system and the notion of managing individual patients within populations of patients,” Weinstein said yesterday. “And given that 40 percent of our patients are from Vermont, I felt that our coordination with Fletcher Allen and all the hospital systems across Vermont really needed to be much better coordinated.”

Although Dartmouth-Hitchcock and Fletcher Allen are leading the effort, nearly all the state’s hospitals and dozens of smaller physician practices are involved as well. OneCare will cover more than one-third of all Vermont Medicare beneficiaries. Down the road, Weinstein said he hopes to include more Medicare recipients, as well as Vermonters on Medicaid and those with private insurance.

The ACO concept was developed at Dartmouth College and included in the Affordable Care Act in 2010. The central aim is to encourage doctors and hospitals to lower costs while maintaining high quality care. In return, providers are rewarded through splitting the savings with Medicare.

There are now more than 250 ACOs caring for an estimated 4 million Medicare beneficiaries in the U.S., according to yesterday’s announcement.

Fletcher Allen president and CEO John Brumsted said he had high hopes for OneCare.

“OneCare Vermont represents a huge shift in medical practice in Vermont,” Brumsted said in a statement. “This is the first time that we’ve been able to arrange for so many hospitals, physicians, and community-based health care services throughout the state to work together to ensure that patients, especially those with chronic conditions such as diabetes or congestive heart failure, will be followed more closely by their primary care provider to reduce the need for hospital admissions or visits to an emergency department. This means a healthier patient and a better quality of life.”

Medicare recipients who are “attributed” to OneCare — that is, those for whom the providers have agreed to make themselves “accountable” on the cost and quality of care — should receive letters in the mail within the next several months that inform them about OneCare and give them the opportunity to opt out of participating.

When it comes to distributing the financial savings, federal guidelines call for a 50-50 split between Centers for Medicare and Medicaid Services and the ACO providers. OneCare encompasses around 280 primary care physicians, according to the application to CMS. Among Vermont’s 14 hospitals, only Porter Medical Center in Middlebury has chosen not to join.

Mt. Ascutney Hospital and Health Center, Gifford Medical Center and Springfield Hospital will be part of OneCare.

“We chose to participate with OneCare Vermont for many reasons,” said Mt. Ascutney CEO Kevin Donovan in an email. “Primarily, we want to improve the quality of care that we provide. We also want to improve the value of those services. Both the State of Vermont and Medicare are encouraging participation in health care reform initiatives, such as the ACO model, to improve coordination between providers, which will correspondingly improve quality and value.”

ACOs are seen as a way that providers can move away from a fee-for-service model, in which doctors are paid according to the amount of care they provide. Such as system, health reformers argue, drives up the cost of care by encouraging doctors to do more treatment, not less.

The OneCare initiative comes as Vermont pushes on with other health reform efforts. Last week, Vermont won federal approval for its health exchange, a statewide insurance marketplace that was part of the Affordable Care Act. The state also has a 2017 deadline to design a single-payer health system by 2017.

When OneCare was proposed last fall, a controversy arose over its status as a for-profit. Hospital officials said they had to set it up that way due to conflicting state and federal laws.

Federal regulations governing ACOs require that at least 75 percent of the governing body include providers participating in the network. By contrast, Vermont’s nonprofit corporation law says no more than 49 percent of the individuals serving on the board can have a personal financial stake. And so, OneCare was set up as a for-profit.

Nearly all of the savings that go to OneCare — 90 percent — will be distributed to the participating health care providers, according to the application submitted to the federal government. The remaining 10 percent will go to cover the costs of providing tools, data and other types of support to the providers.

No one is trying to profit off patients, Weinstein said.

“We’re still going to function as a not-for-profit,” Weinstein said. “Everything we do will be in the not-for-profit vein, but we had to have some sort of legal structure to get our organization working together.”

Dartmouth-Hitchcock has just finished the first year of a separate “Pioneer” ACO that covers more than 18,000 patients in New Hampshire and Vermont. Launched last January, the Pioneer ACO carries more risk for the hospital system than OneCare. It is designed so that Dartmouth-Hitchcock not only shares in the savings, but also the losses if costs rise beyond a certain point.

The data on that effort have not come back from CMS, but Weinstein said he thinks it went well. Dartmouth-Hitchcock hit its targets for quality, he said, but does not yet know whether any money was saved.

Unlike with OneCare, the Pioneer ACO only includes Dartmouth-Hitchcock. It was easier to get other providers on board with OneCare because it came with less financial risk, Weinstein said.

He sees promise for the OneCare model outside of Vermont.

“I’m hoping we can expand this in New Hampshire,” he said. “I think if we could create the same kind of initiative in New Hampshire that we’ve just done in Vermont, I think it would be great for the people of New Hampshire.”